Sunsations Inc., Provisional Acceptance of a Settlement Agreement and Order, 55648-55651 [2011-22879]

Agencies

• Consumer Product Safety Commission

[Federal Register Volume 76, Number 174 (Thursday, September 8, 2011)]
[Notices]
[Pages 55648-55651]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-22879]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 11-C0010]


Sunsations Inc., Provisional Acceptance of a Settlement Agreement 
and Order

AGENCY: Consumer Product Safety Commission.

ACTION: Notice.

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SUMMARY: It is the policy of the Commission to publish settlements 
which it provisionally accepts under the Consumer Product Safety Act in 
the Federal Register in accordance with the terms of 16 CFR 1118.20(e). 
Published below is a provisionally-accepted Settlement Agreement with 
Sunsations Inc., containing a civil penalty of $60,000.00.

DATES: Any interested person may ask the Commission not to accept this 
agreement or otherwise comment on its contents by filing a written 
request with the Office of the Secretary by September 23, 2011.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 11-C0010, Office of the 
Secretary, Consumer Product Safety Commission, 4330 East West Highway, 
Room 820, Bethesda, Maryland 20814-4408.

FOR FURTHER INFORMATION CONTACT: Mary B. Murphy, Assistant General 
Counsel, Division of Compliance, Office of the General Counsel, 
Consumer Product Safety Commission, 4330 East West Highway, Bethesda, 
Maryland 20814-4408; telephone (301) 504-7809.

SUPPLEMENTARY INFORMATION: The text of the Agreement and Order appears 
below.

    Dated: September 1, 2011.
 Todd A. Stevenson,
 Secretary.

Settlement Agreement

    1. In accordance with 16 CFR 1118.20, Sunsations Inc., including 
its officers, agents, directors, and assigns (collectively, 
``Sunsations''), and the staff of the United States Consumer Product 
Safety Commission (``Commission'' or ``Staff'') enter into this 
Settlement Agreement (``Agreement''). The Agreement and the 
incorporated attached Order (``Order'') settle the Staff's allegations 
set forth below.

Parties

    2. The Staff is the staff of the Commission, an independent federal 
regulatory agency established pursuant to, and responsible for the 
enforcement of, the Consumer Product Safety Act, 15 U.S.C. 2051-2089 
(``CPSA'').
    3. Sunsations is a corporation, organized and existing under the 
laws of Virginia, with its principal offices located in Virginia Beach, 
Virginia. At all relevant times, Sunsations sold apparel, accessories, 
and other products.

Staff Allegations

    4. Between March 2008 and November 2010, Sunsations sold and/or 
held for sale various children's upper outerwear products with 
drawstrings at the hood or neck. Specifically, from March 2008 through 
July 2009, Sunsations sold and/or held for sale children's upper 
outerwear products with drawstrings at the hood or neck (sweatshirts), 
manufactured by GJC International and Top Image USA. From May 2009 
through November 2010, Sunsations sold and/or held for sale

[[Page 55649]]

children's upper outerwear products with drawstrings at the hood or 
neck (sweatshirts), manufactured by Exist Inc. and Ragwear. The 
products identified in this paragraph are referenced collectively in 
this document as the ``Sweatshirts.''
    5. The Sweatshirts were sold and/or held for sale to consumers by 
Sunsations.
    6. The Sweatshirts are ``consumer product[s],'' and, at all 
relevant times, Sunsations was a ``retailer'' of those consumer 
products, which were ``distributed in commerce,'' as those terms are 
defined in CPSA sections 3(a)(5), (8), and (13), 15 U.S.C. 2052(a)(5), 
(8), and (13).
    7. In February 1996, Staff issued the Guidelines for Drawstrings on 
Children's Upper Outerwear (``Guidelines'') to help prevent children 
from strangling or entangling on neck and waist drawstrings. The 
Guidelines state that drawstrings can cause, and have caused, injuries 
and deaths when they catch on items, such as playground equipment, bus 
doors, or cribs. In the Guidelines, Staff recommends that no children's 
upper outerwear sizes 2T to 12 be manufactured or sold to consumers 
with hood and neck drawstrings.
    8. In June 1997, ASTM adopted a voluntary standard (ASTM F1816-97) 
incorporating the Guidelines. The Guidelines state that firms should be 
aware of the hazards of children's upper outerwear products with 
drawstrings at the hood or neck and should ensure that garments they 
sell conform to the voluntary standard.
    9. On May 19, 2006, the Commission posted on its website a letter 
from the Commission's Director of the Office of Compliance to 
manufacturers, importers, and retailers of children's upper outerwear. 
The letter urges them to make certain that all children's upper 
outerwear sold in the United States complies with ASTM F1816-97. The 
letter states that Staff considers children's upper outerwear with 
drawstrings at the hood or neck area to be defective and to present a 
substantial risk of injury to young children under Federal Hazardous 
Substances Act (``FHSA'') section 15(c), 15 U.S.C. 1274(c). The letter 
also sets forth the reporting requirements of CPSA section 15(b), 15 
U.S.C. 2064(b).
    10. Sunsations' distribution in commerce of the Sweatshirts did not 
meet the Guidelines or ASTM F1816-97, failed to comport with the 
Staff's May 2006 defect notice, and posed a strangulation hazard to 
children.
    11. On December 3, 2009 and March 10, 2011, the Commission 
announced Sunsations' recalls of the Sweatshirts.
    12. Sunsations had presumed and actual knowledge that the 
Sweatshirts distributed in commerce posed a strangulation hazard and 
presented a substantial risk of injury to children under FHSA section 
15(c)(1), 15 U.S.C. 1274(c)(1). Sunsations had obtained information 
that reasonably supported the conclusion that the Sweatshirts contained 
a defect that could create a substantial product hazard or that the 
Sweatshirts created an unreasonable risk of serious injury or death. 
Pursuant to CPSA sections 15(b)(3) and (4), 15 U.S.C. 2064(b)(3) and 
(4), Sunsations was required to inform the Commission immediately of 
the defect and risk.
    13. Sunsations knowingly failed to inform the Commission 
immediately about the Sweatshirts, as required by CPSA sections 
15(b)(3) and (4), 15 U.S.C. 2064(b)(3) and (4), and as the term 
``knowingly'' is defined in CPSA section 20(d), 15 U.S.C. 2069(d). This 
failure violated CPSA section 19(a)(4), 15 U.S.C. 2068(a)(4). Pursuant 
to CPSA section 20, 15 U.S.C. 2069, this failure subjected Sunsations 
to civil penalties.

Response of Sunsations

    14. Between April 2006 and July 2009, Staff alleged that Sunsations 
sold and/or held for sale various children's upper outerwear products 
with drawstrings at the hood or neck. From May 2009 through November 
2010, Staff also alleged that Sunsations sold and/or held for sale 
upper outerwear products manufactured by Exist Inc. and Ragwear, 
labeled sizes ``S,'' ``M,'' and ``L,'' and bearing drawstrings at the 
hood or neck, which Staff alleged were equivalent to children's sizes 
2T through 12. Sunsations and its agents, officers, and employees deny 
Staff's allegations in paragraphs 4-13 above, including the allegation 
that Sunsations violated the CPSA.
    15. Sunsations maintains that it never received any information 
that would support the conclusion that any hooded sweatshirts it sold 
were defective, within the meaning of the CPSA, until Staff contacted 
Sunsations in July 2009. Specifically, Sunsations maintains that it 
never received the Commission's 2006 letter.
    16. Immediately after Staff contacted Sunsations in July 2009, 
Sunsations initiated a recall of all defective products and offered 
consumers a full refund. The recall encompassed garments sold by stores 
in Virginia Beach, Virginia, Ocean City, Maryland, and North Carolina 
from April 2006 through July 2009.
    17. In December 2009, Sunsations initiated a recall of sweatshirts 
manufactured by GJC International and Top Image USA and offered 
consumers a full refund for sweatshirts sold at stores in Virginia 
Beach, VA, Ocean City, MD, and North Carolina from April 2006 to July 
2009. In March 2011, Sunsations initiated a recall of sweatshirts 
manufactured by Exist Inc. and Ragwear and offered consumers a full 
refund for sweatshirts sold at stores in Virginia Beach, Virginia, 
Ocean City, Maryland, and North Carolina from May 2009 through November 
2010.
    18. The Agreement and Order do not constitute an admission of 
liability on the part of Sunsations.

Agreement of the Parties

    19. Under the CPSA, the Commission has jurisdiction over this 
matter and over Sunsations.
    20. The parties enter into the Agreement for settlement purposes 
only. The Agreement does not constitute an admission by Sunsations, or 
a determination by the Commission, that Sunsations knowingly violated 
the CPSA.
    21. In settlement of Staff's allegations, Sunsations shall pay a 
civil penalty in the amount of sixty thousand dollars ($60,000.00). The 
civil penalty shall be paid within twenty (20) calendar days of service 
of the Commission's final Order accepting the Agreement. The payment 
shall be made electronically to the Commission via https://www.pay.gov.
    22. The Commission will not seek any additional civil penalties 
from Sunsations for possible violations of section 19(a)(4) of the 
CPSA, 15 U.S.C. 2068(a)(4), regarding the alleged violations, or with 
respect to information contained in the Full Reports under CPSC Sec.  
15(b), 15 U.S.C. 2064(b), and 16 CFR 1115.13(d), as of the date of the 
signing of this agreement.
    23. Sunsations shall conduct a comprehensive review of its existing 
apparel inventory for purposes of identifying any upper outerwear 
bearing drawstrings at the hood or neck (``Drawstring Garments''), 
irrespective of whether such garments are are sized, marketed, or 
otherwise intended for use by children. Through this review, an 
Inventory Review Completion Report will be prepared and submitted to 
Staff by Sunsations no later than ten (10) calendar days of service of 
the Commission's final Order accepting the agreement. A purpose of this 
inventory review is to provide guidance to Sunsations for determining 
what constitutes children's upper outerwear within the meaning of the 
ASTM

[[Page 55650]]

F1816-97 voluntary standard and related Commission guidelines.
    24. Sunsations shall designate an employee to serve as its Product 
Safety Manager (``Manager''). The Manager's duties will include, but 
will not be limited to, reviewing Sunsations' current and future 
purchases of upper outerwear to ensure that Sunsations does not 
purchase for sale or distribute in commerce, children's upper outerwear 
with drawstrings at the neck or hood.
    25. The Inventory Review Completion Report shall include, to the 
extent available, the following information:
    a. A description (by style number) of the Drawstring Garments in 
inventory that Sunsations reviewed, and the approximate number of units 
of each Drawstring Garment that Sunsations holds in inventory as of the 
date of signing of this agreement;
    b. The style, most recent date(s) of purchase, the identity of the 
company/ies from which the Drawstring Garments was/were purchased, and 
(if applicable) the period of time during which Sunsations sold or 
offered for sale the Drawstring Garments;
    c. One sample of each available size of each Drawstring Garment 
identified during the course of the inventory review;
    d. A description of the step(s) Sunsations has taken to ameliorate 
the strangulation hazards posed by each of the Drawstring Garments;
    e. The identity of the Manager who Sunsations has designated as 
responsible for Product Safety;
    f. A proposal outlining the methods by which the Manager will 
ensure that, from this point forward, Sunsations does not purchase 
children's upper outerwear bearing drawstrings; and
    g. The following certification signed by an officer of Sunsations:

    Pursuant to 28 U.S.C. 1746, I certify under penalty of law that 
I have examined and am familiar with the information submitted in 
this document and all attachments and that the information is true 
and correct. I am aware that there are significant penalties for 
submitting false information to federal officials, including the 
possibility of fines and imprisonment.

    h. The report shall be directed to the following Staff: Seth 
Popkin, Lead Trial Attorney, Office of the General Counsel, Division of 
Compliance, U.S. Consumer Product Safety Commission, 4330 East West 
Highway, Bethesda, MD 20814.
    26. Sunsations will not be liable for possible violations of 
subsection 19(a)(4) of the CPSA, 15 U.S.C. 2068(a)(4), based on any 
information that Sunsations reports to the Commission as part of the 
Inventory Review Completion Report described in paragraph 25 above. 
However, Sunsations remains potentially liable for other possible 
violations of section 19(a) of the CPSA, 15 U.S.C. 2068(a), for 
information reported to the Commission after the date of the signing of 
this agreement. Except as expressly provided in this document, nothing 
in this Agreement is intended, nor may it be construed to alter 
Sunsations' potential liabilities under any and all applicable laws, 
statutory provisions, regulations, rules, standards, and/or bans 
enforced and administered by the Commission.
    27. Upon provisional acceptance of the Agreement, the Agreement 
shall be placed on the public record and published in the Federal 
Register, in accordance with the procedures set forth in 16 CFR 
1118.20(e). In accordance with 16 CFR 1118.20(f), if the Commission 
does not receive any written request not to accept the Agreement within 
fifteen (15) calendar days, the Agreement shall be deemed finally 
accepted on the sixteenth (16th) calendar day after the date it is 
published in the Federal Register.
    28. Upon the Commission's final acceptance of the Agreement and 
issuance of the final Order, Sunsations knowingly, voluntarily, and 
completely waives any rights it may have in this matter to the 
following: (1) An administrative or judicial hearing; (2) judicial 
review or other challenge or contest of the validity of the Order or of 
the Commission's actions; (3) a determination by the Commission of 
whether Sunsations failed to comply with the CPSA and its underlying 
regulations; (4) a statement of findings of fact and conclusions of 
law; and (5) any claims under the Equal Access to Justice Act.
    29. The Commission may publicize the terms of the Agreement and the 
Order.
    30. The Agreement and the Order shall apply to, and be binding 
upon, Sunsations and each of its successors and assigns.
    31. The Commission issues the Order under the provisions of the 
CPSA, and violation of the Order may subject Sunsations and each of its 
successors and assigns to appropriate legal action.
    32. The Agreement may be used in interpreting the Order. 
Understandings, agreements, representations, or interpretations apart 
from those contained in the Agreement and the Order may not be used to 
vary or contradict their terms. The Agreement shall not be waived, 
amended, modified, or otherwise altered without written agreement 
thereto executed by the party against whom such waiver, amendment, 
modification, or alteration is sought to be enforced.
    33. If any provision of the Agreement and the Order is held to be 
illegal, invalid, or unenforceable under present or future laws 
effective during the terms of the Agreement and the Order, such 
provision shall be fully severable. The balance of the Agreement and 
the Order shall remain in full force and effect, unless the Commission 
and Sunsations agree that severing the provision materially affects the 
purpose of the Agreement and the Order.
    34. Sunsations represents that before making this Agreement it has 
consulted with its attorneys, and that its attorneys have participated 
in negotiating the substance of this Agreement and have reviewed the 
language of the Agreement. Sunsations represents that it is fully 
satisfied with the services of its attorneys with respect to the 
Agreement, and that it has entered into the Agreement voluntarily and 
with full knowledge of its legal rights.

Sunsations Inc.

    Dated: August 11, 2011. By:
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Yaron Sibony, President, Sunsations Inc., 353 Village Road, Virginia 
Beach, VA 23454.

U.S. Consumer Product Safety Commission Staff.
Cheryl A. Falvey, General Counsel.
Mary B. Murphy, Assistant General Counsel, Office of the General 
Counsel.

    Dated: August 12, 2011. By:
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Jason E. Yearout, Trial Attorney, Division of Compliance, Office of 
the General Counsel.

Order

    Upon consideration of the Settlement Agreement entered into between 
Sunsations Inc. (``Sunsations'') and the U.S. Consumer Product Safety 
Commission (``Commission'') staff, and the Commission having 
jurisdiction over the subject matter and over Sunsations, and it 
appearing that the Settlement Agreement and the Order are in the public 
interest, it is
    Ordered, that the Settlement Agreement be, and hereby is, accepted; 
and it is
    Further Ordered, that Sunsations shall pay a civil penalty in the 
amount of sixty thousand dollars ($60,000.00) within twenty (20) 
calendar days of service of the Commission's final Order accepting the 
Agreement. The payment shall be made electronically to the CPSC via 
https://www.pay.gov. Upon the failure of Sunsations to make the 
foregoing payment when due, interest on the unpaid amount shall accrue 
and be paid by Sunsations at the federal legal rate of interest set 
forth at 28 U.S.C. 1961(a) and (b).


[[Page 55651]]


    Provisionally accepted and provisional Order issued on the 1st 
day of September, 2011.

    By Order of the Commission.
Todd A. Stevenson,
Secretary, U.S. Consumer Product Safety Commission.
[FR Doc. 2011-22879 Filed 9-7-11; 8:45 am]
BILLING CODE 6355-01-P